Guys and Gals, uncles and aunties - need some advise from those who left full time employment for short term contracts. Particularly within the telecommunications area.
I have recently been offered a contracting position, 6 months initially but have the right to renew for up to 18 months in 6 monthly terms. The money is quite good, what I make in 6 months contracting is equivalent to 12 months on my current full time role.
Because I’m new to this idea, I’m quite unsecure about contracting. What precautions should I be taking before signing the contract? and I guess the big questions are - how did it turn out for you financially? Did it do any good to your career?
Advise from from HR guru’s would also be appreciated.
Re: Full time employment VS Short term contracting
Flyin, contracting can be quite fulfilling from the following perspectives :
1- Financially: its a known fact that what you earn in a years time in a full time job , can be earned in 6 months time through contracting. So financially you will most certainly be doing well
2- When you start contracting , you get to know the companies inside out and it can help you tonns when later in life you decide to go fulltime ... coz many companies arent what they look like but once you are with them, you get to know the culture, the people and that gives you an idea of whether you can work with them fulltime for a few years and get good prospects of growth in every way. The more the companies get to know you and your work, the more chances that you will be offered a permanent role when one comes up.
The downside of contracting :
- When you continue contracting for a long while, the employers find it challenging to employ you into full time roles .. mainly coz they know you are used to quick money earning from contracts and moving from job to job etc ... so they will question your stability in the role. Not very difficult to convince the companies of why you want to start full time employment.
You must be ready to play your best pitch every single day , coz contractors dont have the space to make mistakes. One slight mistake can cost you , your job ... you can be asked to leave without a day's notice. hence you must be prepared to learn very quickly with minimum risk of mistakes .. and focus more on your work and targets and dont involve yourself deeply with politics etc ...
you dont get the same benefits that a full time employee gets .. for example , paid holidays, childcare benefits, unfair dismissal claims , bonuses etc .. there are many things that you will miss out on being a contractor .. but you are being compensated by extra money .
When you finish up with your contract , you might come under stress if you dont find the next contract quickly.. sometimes it can take a few months to find the next one. so it depends on your skill and financial situation .. if you can afford to be out of contract for a long period of time ... Most skilled people remain jobless not more then 3-4 months before they manage to get into another contract .
So yeah, this is an insight into the world of contracting .. dont hesistate to ask us any questions that may come to mind .
Re: Full time employment VS Short term contracting
Thanks CB, I'm in full time employment right now. The only incentive moving into contracting is the money I guess. What really worries me is that I don't really have much appreciation for the whole contracting bizzo and the last thing I want is end up unemployed for a while if I do decide to take full time employment again. The Platform I support right now is quite limited to opportunities.
Mirch, family is a concern for me too. NZ is quite small and the last thing I want is going across the ditch to find future employments when this contract is finished. What area are you in BTW?
Re: Full time employment VS Short term contracting
I also went from contract work to salaried position. As noted earlier, the remuneration and the flexibility in contract work are primarily the reasons why most would pursue it. Also, a full-time gig often ties you down to a “product” (e.g. a specific platform, a portfolio, a program etc.), while as a consultant, you offer “services” and can get to work with a multitude of products and fields. It’s basically stability and uniformity (full-time) versus volatility and variety (contract). I know I might be oversimplifying things, but by definition, contract work is more entrepreneurial, thus introducing more risk, and hence, with potential of higher returns.
Talking about returns though, when you compare your remuneration, make sure you account for not just your gross salary but also things like vacation pay, stat holidays, health & dental coverage, pension contributions etc. A second suggestion I have is that if you’re planning to pursue contract work on a long-term basis, you should look into incorporating yourself. Being incorporated with facilitate expense deductions as well as income splitting, and these can mean more net income after taxes.
Re: Full time employment VS Short term contracting
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Mirch, family is a concern for me too. NZ is quite small and the last thing I want is going across the ditch to find future employments when this contract is finished. What area are you in BTW?
I live in USA. I will advise against quiting full time employment in this economy.